Have you accounted for long-term care expenses in your retirement planning? If you haven’t, it’s crucial to address this aspect of your future. Research indicates that most Americans reaching age 65 this year will require some form of long-term care as they age, and the associated costs can be steep.
The expense of long-term care varies depending on the type of service required and the location where those services are provided. According to the Genworth Cost of Care Survey, the national median costs for long-term care range from approximately $1,690 per month for adult day care services to around $9,034 per month for a private room in a nursing home. If you’re living in Maryland, the long-term care expenses are significant, which is why it’s essential for you and your family to prepare ahead for them.
Cost of Long-Term Care in Maryland
The following data shows average costs based on facilities all over Maryland, but the actual costs of care may vary in your specific location. Additionally, some long-term care needs can be fulfilled by family and friends, so depending on the support group of the person needing care, these costs may not be necessary for all retirees.
On the other hand, some old-age illnesses such as Alzheimer’s will almost always result in the need for long-term care during the late stages of the disease, despite how supportive or available loved ones are to help.
No matter what, it’s worth considering the need for long-term care costs as part of your retirement plan. The following table shows the median cost of long-term care services in Maryland:
Type of Care | Monthly Median Cost in 2024 |
Adult Day Health Care | $2,343 |
Homemaker Services and/or Home Health Aide | $5,892 |
Assisted Living Facility | $7,107 |
Nursing Home: Semi-Private Room | $11,858 |
Nursing Home: Private Room | $13,221 |
Nursing home care, whether in a semi-private room or private room, may be well above most people’s monthly mortgage payments.
So how can you build these expenses into your retirement plan if you had planned on mitigating housing costs in the remaining years of your life?
Options to Pay for Long-Term Care
If thinking about paying for these costs on your own feels overwhelming, you have options. The three most common options include:
- A stand-alone long-term care insurance policy
- Addition of a long-term care rider to a life insurance policy
- Long-term care add-on to a fixed or indexed annuity
Stand-alone policies have been decreasing in popularity because the annual premiums can be quite expensive and the policies usually offer no cash benefit to survivors if the benefits aren’t used. However, stand-alone policies may be a good option for those who can afford the premiums and are relatively sure they’ll need long-term care coverage later in life.
Two better options might be to add long-term care insurance to existing contracts you own. If you have a permanent life insurance policy, many insurers offer an add-on called a long-term care rider. For an additional premium, the rider may come with death benefits.
And if you own an annuity, you may be able to purchase a similar add-on in which additional amounts would be added to your monthly annuity income if you ever need to pay for long-term care.
Work With a Trusted Professional
While we can’t predict the future, long-term care expenses are a reality many will face. With so many options to consider, it’s understandable if the choices feel overwhelming. Every individual’s needs are unique, and several factors should guide how you incorporate long-term care into your retirement planning.
Don’t face these decisions alone. Partner with trusted professionals like our team at Premier Planning Group to gain clarity on your options and choose the best path forward for you and your loved ones.
Call our office at (443) 837-2520 or email my executive assistant, Talia Grover, at taliagrover@premierplanninggroup.com to set up a complimentary consultation.
About Brion
Brion Harris is the CEO, founder, and managing partner of Premier Planning Group, an independent financial firm specializing in working with pre-retirees and retirees, helping them create customized wealth preservation and retirement distribution strategies. With over 20 years of experience, Brion has developed deep knowledge and skill in helping his clients simplify their finances and find confidence in their financial future. Brion and the Premier Planning team are known for their unparalleled client service and their dedication building long-lasting relationships with their clients. As a result, Brion has been the recipient of the #1 Advisor Leadership Award* at Summit Brokerage Services for eight years running and has a reputation as one of the top retirement advisors in the business.
Brion is a proud 20-year resident of the Annapolis community, where he resides with his wife, Elizabeth, their three children, Addison, Jay, and Scarlett, and their two dogs, Pepper and Coco. When he’s not working, you can find him boating, skiing, traveling, and enjoying good food and music with his family. If you want to learn more about Brion, connect with him on LinkedIn.
*The #1 Advisor and Leadership Award is based on production data while at Summit Brokerage Services, Inc. Brion Harris received the award in 2014, 2015, 2016, 2017, 2018, 2019, 2020 and 2021. This award is not a guarantee of future investment success. This recognition should not be construed as an endorsement of the advisor by any client.